From the age of 65 people may apply for old age pension and related payments from TR (Social Insurance Administration). Pension payments are divided into a number of classes, and there are also some grants and benefits that can be applied for.
It is necessary to apply for the commencement of disbursement of old-age pensions from the Social Insurance Administration. Old-age pensions will, however, be created for disability pensioners in the proximate month after they have reached the age of 67.
Prospective old-age pensioners will have an application form sent to them from the Social Insurance Administration (TR) shortly before they reach the age of 67, accompanied by all the most important information on their pension rights.
When applying for an old-age pension you will also need to submit an income estimate. Notice must be given of all changes in income from what the Social Insurance Administration (TR) has information on.
Pension payments are tax liable as wage and pension fund income.
Tax cards may be divided between the Social Insurance Administration (TR) and pension funds, or other payers if a pensioner receives income from other sources apart from an old-age pension. You can also apply for your spouse's unused personal tax allowance.
Payments to pensioners start at the age of 67.
Those who begin receiving a pension after 1 January 2007 can defer receiving their pension up to the age of 72, but the amount of benefits increases by 0.5% for every month pension payments are deferred.
Those who have been seamen for 25 years can start receiving a pension from the age of 60.
Those who have lived in Iceland for a period of 40 years between the ages of 16 and 67 are entitled to receive a full pension. Otherwise benefit payments are worked out as a ratio of the duration of residence.
Those who have resided or worked abroad may be entitled to pension payments in the relevant country. the Social Insurance Administration (TR) is in many instances a mediating agent for applications.
Old-age pension payments consist of:
pension supplement and
household supplement - paid to those who are solely responsible for a household and who receive low income allowance.
In addition, old-age pensioners may be entitled to supplementary benefits. These are paid to those who would not otherwise be able to provide for themselves.
When such a situation arises compensatory benefits must be applied for.
The amount of compensatory benefit is assessed in each instance, and compensatory benefits are temporary.
Pensioners may be entitled to various grants and benefits in addition to the old-age pension, and you should check and apply for these along with your application for old-age pension.
Old-age pension and other associated payments from social security are income linked and will be reduced when monthly individual income exceeds a certain income limit.
Those who have collected pension-fund savings over the course of their life will receive a pension paid from their own pension fund.